According to the 2012 China Top 500 Enterprises report published recently by the China Enterprise Confederation and the China Enterprise Directors Association, domestic enterprises may have expanded rapidly in terms of scale, yet their profitability is beginning to decline.
Many of the nation's top companies have reached a point where they can no longer depend on traditional development methods to expand. The time has come for them to start innovating if they want to grow.
Established local firms in China need to start investing more money into funding research and development. Every year, domestic enterprises spend billions of yuan importing advanced technology, yet most spend little to create innovative products or services of their own.
Meanwhile, Chinese companies need to focus more on satisfying the demands of their customers. As major companies overseas learned decades ago, only businesses which can win the favor of the public can grab a large share of the market, yet this idea has yet to dawn on a surprisingly large number of local companies.
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